Non-Fungible Tokens

News: According to a report, the sales of Non-Fungible Tokens (NFTs) surged USD 25 billion in 2021 as the crypto asset exploded in popularity. However, some experts believe NFTs are a bubble that might pop.

What are NFTs?

  • Anything that can be converted into a digital form can be an NFT. Everything from drawings, photos, videos, GIFs, music, in-game items, selfies, and even a tweet can be turned into an NFT, which can then be traded online using cryptocurrency.
  • If anyone converts its digital asset to an NFT, he/she will get proof of ownership, powered by
  • There is a need for a cryptocurrency wallet and an NFT marketplace where one can buy and sell NFTs.
  • Some of the NFT marketplaces are, Rarible, Foundation.
  • NFTs are different from other digital forms in that they are backed by Blockchain technology.
  • NFTs can have only one owner at a time. Apart from exclusive ownership, NFT owners can also digitally sign their artwork and store specific information in their NFTs metadata.
  • This will be only viewable to the individual who bought the NFT.
  • Terra Nulius was the first NFT(started in 2015) on Ethereum Blockchain, although this project was merely an idea that only allowed to customise a short message which was then recorded on the blockchain.
  • Then came Curio Cards, CryptoPunks and CryptoCats in 2017, before NFTS slowly moved into public awareness, then expanding into mainstream adoption in early 2021.

NFT v/s Cryptocurrencies:

  • Apart from NFTs and cryptocurrencies being built on Blockchain, both are different from each other.
  • Cryptocurrency is a currency and is fungible, meaning that it is interchangeable.
  • For instance, if one holds one crypto-token, say one Ethereum, the next Ethereum that the one holds will also be of the same value. However, NFTs are non-fungible, which means the value of one NFT is not equal to another. Nonfungible means NFTs aren’t mutually interchangeable.
  • Every art is different from others, making it non-fungible, and unique.